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InformationWeek 500: Service Providers Among Top Investors In New Tech


Business services providers led all industries in terms of expectations for increased tech spending in 2007, with 78% of those surveyed saying they'll spend more on IT this year than last.



Outsourcers and other business services companies need new tricks now that nearly all of them provide offshore outsourcing, and wages are rising in hot spots like Bangalore. That may be why they're somewhat more aggressive in technology adoption than companies in other industries.

Outsourcers and other business services companies led all industries in terms of expectations for increased tech spending, with 78% of those surveyed saying they'll spend more on IT this year than in 2006, compared with an average of 56% in all other industries. Industry members on the InformationWeek 500 list spend 4% of revenue on IT, on average, with only four of 22 industries spending more.

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click image to view the Consulting & Business Services Industry Snapshot
Industry growth is helping to fund some of this investment. IBM Global Business Services saw a 10.1% increase in second-quarter revenue on what CFO Mark Loughridge called "improved pricing capabilities."

Hewitt Associates shows how some business services firms put that money to work. The company introduced an internally developed application that lets its business customers view the cost impact of health-plan changes in real time.

Armed with laptops, Hewitt reps meet with customers and show how changes such as swapping out one drug for a lower-cost alternative will affect health care costs. To build it, Hewitt consulted with doctors at the University of Michigan and Harvard Medical School. Says Jennifer Boehm, a principal in Hewitt's health management practice, "We view IT as a competitive advantage."

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